The online poker world has been buzzing in recent weeks over the cheating scandal that has erupted at Ultimate Bet. Coming on the heels of a similar scandal at UB's sister site, Absolute Poker, the irregular activity at UB culminated on Thursday, when UB released a statement. PocketFives.com has an inside look at UB's statement.

The statement sums up the findings of the investigation: "The investigation has concluded that certain player accounts did in fact have an unfair advantage, and that these accounts targeted the highest limit games on the site. The individuals responsible were found to have worked for the previous ownership of UltimateBet prior to the sale of the business to Tokwiro in October 2006."

How did the cheating occur? UB explains, "The fraudulent activity was enabled by unauthorized software code that allowed the perpetrators to obtain hole card information during live play. The existence of this vulnerability was unknown to Tokwiro until February 2008 and existed prior to UltimateBet's acquisition by Tokwiro in October 2006. Our investigation has confirmed that the code was part of a legacy auditing system that was manipulated by the perpetrators."

Back in January, UltimateBet was given notice of potential cheating by the account "NioNio." The account was suspended in order to investigate. NioNio had won an abnormally large percentage of the time. A thread on twoplustwo noted that, at one point, NioNio had won in 13 of his last 14 sessions for $135,000. He had been winning at 114 big blinds per 100 hands.

In February, UltimateBet's investigation confirmed that the suspicious accounts belonged to "individuals who had worked for UltimateBet under the previous ownership," according to the press release issued Thursday. The cheating occurred over a 20 month period from March 6, 2006 to December 3, 2007. Account names that were used included NioNio, Sleepless, NoPaddles, nvtease, flatbroke33, ilike2win, UtakeIt2, FlipFlop2, erick456, WhackMe44, RockStarLA, stoned2nite, monizzle, FireNTexas, HeadKase01, LetsPatttty, NYMobser, and WhoWhereWhen.

UltimateBet claims to have removed the code that enabled these accounts to cheat in February, 2008. The process of refunding customers will now begin. In addition, the press release states, "UltimateBet customers are no longer permitted to change account names unless they have suffered abuse in chat rooms." More importantly, "Accounts related to the fraudulent activity have been disabled, and the individuals associated with those accounts permanently banned from the site." UB's parent company is also pursuing legal action.

A new addition to UltimateBet in the future will be a state of the art Security Center. The press release describes how it will work: "The first release of the new Security Center focuses solely on the immediate detection of abnormal winnings. Gaming mathematicians, poker professionals, and security software developers have all contributed to the specifications for the new Security Center." A Poker Security team will compliment the Security Center and focus on preventing fraud.

Ultimate Bet is licensed by the Kahnawake Gaming Commission. The site opened for business in 1999. Phil Hellmuth and PocketFiver Annie Duke currently serve as the faces of the site. The site just announced that PocketFiver Cliff "johnnybax" Josephy is the newest member of Team UB.

To read the statement released by UltimateBet in its entirety, click here.
For a complete Q&A on the scandal, click here.

<p>I would love someone to address/question UB directly about their relationship with the KGC. I understand that the KGC is run by the Mohawks of Kahnawake, who are also owners of Tokwiro Inc, who owns both UB and AP.</p>
<p>Isn't it a conflict of interest for the same people to both own the regulatory commission and the gaming sites that the commission is supposed to police?</p>

<p>Yes, I'm serious. Tokwiro Enterprises (who owns AP and UB) is owned by Joe Norton, who used to be Grand Chief of the Mohawks of Kahnawake a couple years ago. The Kahnawake Gaming Commission is obv run by the Mohawks of Kahnawake. So it may not be the same exact person that runs both UB/AP and the KGC, I would bet the two entities are intimately associated.</p>
<p>Its like having me own a casino in Las Vegas and having my brother be the head of the Nevada Gaming Commission.</p>
<p><a rel="nofollow" target="_new" href="http://pokerworks.com/article-1371.html">pokerworks.com/article-1371.html</a></p>

<p>There HAS to be a regulatory agency that is above reproach for online gaming to survive the long run. The public has to feel secure that the sites are honest. If these breeches continue to occur over and over online gambling is in for a short lived existence. There is just too much exposure in computer program software to allow loose controls. The current "controlling" agency is a joke- may as well have none at all.</p>

<p>In a way, the new owners of UB are getting a bit of a bum rap from the previous owners. Like getting sloppy seconds and getting herpes.</p>
<p>Well hopefully current UB management can right the ship and get their shit together.</p>
<p>On a site note: Would LOVE to see a World Online Gaming Commission started just for this to regulate the other gaming commissions.</p>